Friday, February 1, 2013

Albert Einstein: Socialist

What's is really intriguing about the article is that Einstein seems to take an Austrian type methodological view of economics, roughly similar to Mises and Hayek, that the science of economics is different from the physical sciences. It's not as developed as the thinking of Mises and Hayek but it runs roughly along the same lines.

That's the first part of the article. In the second half, the true limitations of Einstein's understanding of economics come through, as he called for a socialist society. This means Einstein did not understand how prices develop in a free market, the importance of prices as signals and the impossibility of developing a sophisticated economy under socialism/communism.

Of note, Einstein's cousin, Norbert Einstein, was a free market economist. Many years ago, Mrs. Bettina Bien Greaves told me that Norbert said of his cousin that he did not understand money and was totally confused by IRS tax forms.

The Mises Institute is hosting, as part of its oral history project, a two day event with Mrs Greaves, I'm sure those questioning Mrs. Greaves will half plenty to ask her, but a question or two about Norbert and his famous cousin might also be interesting.

3 comments:

In Hayek's (Bartley's) book "THE FATAL CONCEITThe Errors of Socialism" he mentions Einstein as an example of those intellectuals who have opinions about economics by never read anything in depth on the subject. For example, Einstein had no knowledge of marginal utility.

It's obvious he is using the original definition of the word "capitalism" which was still very common in the 40's. Free-market liberals (e.g.; Thomas Hodgskin) coined the word and associated it with government privileges for the capital-owning class and that's how it was most commonly used until the mid-twentieth century.